Univ.of  Hi.  Library 

5*f 

IIU 

R-E-P  -G  R T 

Oak  Street 
UNCLASSIFIED 


COMMITTEE  ON  THE  HARBOR  AND  SHIPPING 


OF  THE 

dbamtKV  of  (S^ommme  of  tbo  of  potO'^ovb 


ON  THE  BILL  PENDING  IN  CONGRESS  ENTITLED  A 


**  Bill  io  Promote  the  Commerce  and  Increase  the 
Foreign  Trade  of  the  United  States  and  to  Pro- 
vide Auxiliary  Cruisers,  Transports  and  Seamen 
for  Government  Use  when  Necessary/' 


Presented  to  and  adopted  by  the  Chamber  February  1,  1900. 


N EW-T  ORK  : 

PRESS  OF  THE  CHAMBER  OP  COMMERCE. 


1900. 


REPORT 


OF  THE 

COMMITTEE  ON  THE  HARBOR  AND  SHIPPING 


OF  THE 

(Sbamber  of  ®ommem  of  the  tate  of  |leuj-^oeh 


ON  THE  BILL  PENDING  IN  CONGRESS  ENTITLED  A 


Bill  fo  Promote  the  Commerce  and  Increase  the 
Foreign  Trade  of  the  United  States  and  to  Pro- 
vide Auxiliary  Cruisers,  Transports  and  Seamen 
for  Government  Use  when  N ecessary/' 


Presented  to  and  adopted  by  the  Chamber  February  1,  1900. 


N EW‘Y  0 R K : 

PRESS  OF  THE  CHAMBER  OF  COMMERCE. 


1 900. 


Digitized  by  the  Internet  Archive 
in  2016  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/reportofcommitte00newy_23 


REPORT. 


To  the  Chaynher  of  Commerce : 

Your  Coramittee  on  the  Harbor  and  Shipping,  to  which  was 
referred  Bill  H.  R.  64,  entitled  “ A Bill  to  promote  commerce  and 
increase  the  foreign  trade  of  the  United  States  and  to  provide 
auxiliary  cruisers,  transports  and  seamen  for  Government  use,  when 
necessary,”  has  had  the  matter  under  its  most  careful  consideration, 
and  beg  to  report : 

That  this  is  the  third  time  that  the  subject  matter  of  this  Bill, 
viz.,  “ the  decline  in  our  mercantile  marine,”  has,  during  the  present 
generation,  been  referred  to  this  Committee,  viz.,  in  1882,  1885, 
, and  at  this  time.  In  each  of  the  two  preceding  instances,  quite  full 
and  exhaustive  reports  were  made  showing  the  causes  which  had 
led  to  this  decline  and  the  possible  remedies  to  be  applied.  No 
action  was  then  or  has  been  since  taken  by  Congress  in  connection 
with  this  subject,  and  now,  a third  time,  are  we  presented  with  the 
query  ; Shall  we  now  adopt  any  steps  to  restore  the  American 
mercantile  marine  or  not  ? And  in  this  latter  event  continue  on  in 
our  former  mood  of  inaction  and  accept  all  the  results  therefrom, 
which  past  experience  most  clearly  indicates  will  follow.  We 
know  that  the  brief  hours  devoted  to  business  by  the  members  of 
the  Chamber  are  so  crowded  with  momentous  and  pressing  ques- 
tions of  each  individual’s  concerns,  that  we  cannot  expect  the  study 
of  any  public  question  requiring  time  and  application  to  grasp  its 
^ true  import — unless  the  subject  directly  affects  their  personal  inter- 
ests. Hence  we  feel  the  more  deeply  the  responsibility  placed  upon 
us  as  a Committee,  to  whom  you  have  always  paid  the  kindest 
respect  and  deference  to  our  views.  We  have  first  deemed  it  only 
^ courteous  to  call  the  personal  attention  of  each  and  every  member 
of  the  Chamber  to  the  Bill  in  question,  by  sending  to  each  a circular 
. ^ letter,  containing  an  accurate  summary  of  the  Bill,  not  too  long  to 


97B206 


4 


be  read  even  by  a very  busy  man,  and  have  invited  expressions  of 
individual  judgment  of  the  Bill. 

Let  us  for  a moment  recall  our  experience  : 

First.  Our  civil  war  awoke  us  to  the  consciousness  that  we  had 
no  navy  and  no  means  of  protection  or  of  effectively  carrying  out 
the  existing  laws  of  the  Union,  and  in  our  first  report  in  1882,  we 
showed  that  the  actual  monetary  loss  from  this  cause  was  not  less 
than  one  thousand  millions  of  dollars,  the  prolongation  of  the  war 
at  least  twice  or  three  times  the  duration  it  would  have  had  under 
proper  conditions  of  defence  and  aggression,  and  the  additional 
incalculable  loss  of  life  from  such  prolongation 

Second.  The  first  surrender  and  transfer  of  our  shipping  to 
foreign  flags  and  a continuous  state  of  inaction  during  the  next 
twenty  years  lost  to  the  United  States  so  much  of  its  foreign  carry- 
ing trade,  that  we  had  sunk  from  carrying  75  per  cent,  of  it  before 
the  war,  to  in  1885,  carrying  anything  less  than  20  per  cent. 

Third.  Our  report  of  1885  shows  conclusively  that  this  result 
can  in  no  wise  be  attributed  to  a “ protective  tariff,”  but  was  a 
normal  result  to  us  of  a free  and  unrestricted  foreign  carrying  trade 
thrown  open  to  the  world,  and  likewise  due  to  the  fact  that  not  a 
measure  was  adopted  by  this  Government  to  foster  or  preserve 
this  valuable  heritage,  whilst  other  nations  wisely  acquired  it  by 
mail  compensations,  direct  subsidies,  under  various  ‘'aliases,” 
and  every  possible  enactment  that  was  required  to  effect  this  end. 

Fourth.  That  this  statement  has  been  since  still  further  confirmed 
and  its  folly  emphasised  by  the  years  which  have  since  elapsed,  and 
during  which  the  same  “ let  alone  ” policy  has  been  permitted,  and 
now  the  statement  is  made  that  in  1898  we  carried  in  American 
bottoms  the  pitiful  total  of  8 per  cent,  of  our  foreign  commerce. 

And  all  this  in  view  of  the  fact  that  the  bulk  of  this  trade  is 
many  times  increased — it  now  reaching  to  the  enormous  total  of 
two  thousand  millions  of  dollars  in  value  per  annum.  It  is  esti- 
mated that  the  freights  which  are  yearly  paid  on  this  traffic  with 
passage  money  will  nearly  average  two  hundred  millions  per  annum. 
If  it  has  been  even  one  hundred  and  fifty  millions,  the  gigantic  and 
almost  inconceivable  sum  of  five  thousand  millions  of  dollars  has 
been  poured  into  the  pockets  of  foreign  ship  owners,  to  their  en- 
couragement and  enrichment,  whilst  if  by  any  possible  expedient 


6 


or  legislation  it  could  have  come  into  this  country,  or  one-half  of 
it,  its  mere  use  to  the  citizens  of  the  United  States  would  be  equal, 
at  6 per  cent,  for  the  period  named,  to  a total  of  nearly  one  thousand 
six  hundred  millions  of  dollars,  or  a yearly  sum  of  four  and  one-half 
millions.  Whilst  the  disbursement  of  so  considerable  a sum  of 
money  in  the  various  channels  from  which  the  maintenance  of  a 
mercantile  marine  is  had,  would  have  vastly  increased  industries 
and  contributed  employment  to  labor  in  these  industries. 

Such  has  been  the  loss  to  the  United  States. 

Let  us  see  what  the  rest  of  the  world  has  been  doing  in  this  time. 
If  any  one  wishes  to  get  an  accurate,  well  informed  judgment  on 
this  whole  subject,  let  him  get  a copy  of  the  remarkable  report  of 
the  United  States  Commissioner  of  Navigation,  made  for  the  fiscal 
year  ending  June  30,  1899,  a most  voluminous  and  exhaustive  docu- 
ment, your  Committee  can  only  make  a few  extracts  therefrom, 
and  beg  that  all  who  take  an  intelligent  interest  in  the  subject  will 
read  that  report.  Here  follows  the  Commissioner’s  analysis  of 
foreign  steam  tonnage,  comparing  its  condition  in  1873-74,  and  the 
year  1898-99  : 


Year  18 

173-4. 

Year  1898-9. 

Increase. 

Country. 

Tonnage. 

Per  Cent. 

Tonnage. 

Per  Cent. 

Per.  Cent. 

Oreat  Britain, ...... 

2,624,431 

60.4 

10,993,111 

58.5 

311. 

United  Stales, 

483,040 

11.2 

810,800 

4 2 

68. 

France, 

316,765 

7.4 

952,682 

5.1 

200. 

Germany, 

204,894 

4.8 

1,625,521 

8.3 

693. 

Spain, 

138,675 

3.3 

. 520,847 

2.7 

275. 

Italy, 

85,045 

1.9 

420,880 

2.2 

395. 

Holland, 

72,753 

1.7 

363,200 

1.9 

399. 

Russia, 

67,522 

1.6 

358,415 

1.8 

430. 

Norway, 

41,602 

.9 

628,493 

3.3 

1,410. 

Japan, 

439,509 

2.3 

All  others, 

293,496 

6.8 

1,773,674 

9.5 

504. 

Total, 

4,328,193 

18,887,132 

336. 

During  this  period  the  world’s  sail  tonnage  has  decreased  from 
14,200,000  tons  to  8,700,000.  Here  is  certainly  a startling  schedule 
well  worthy  of  study.  The  very  able  Commissioner  of  Navigation 
has  not  hesitated  to  make  a very  careful  analysis  of  each  item. 
The  Commissioner  states  the  following  facts  : 

First.  All  the  ten  countries  named,  except  the  United  States, 
have  adopted  the  Free  ship  system,  and  admit  to  registry  vessels 
built  in  other  countries.  Great  Britain,  in  fact,  rarely  admits 
vessels  built  elsewhere,  as  she  builds  more  cheaply  at  home. 


6 


Second.  Nearly  all  the  countries  named,  except  the  United 
States,  can  operate  vessels  at  a lower  cost  (excluding  factors  based 
on  first  cost,  such  as  depreciation,  insurance  and  interest)  than  can 
Great  Britain. 

Third.  All  the  countries  named,  whether  under  free  trade  or 
protection,  except  the  United  States  and  Norway,  have  for  some 
years,  and  for  some  purpose,  consistently  pursued  some  method  of 
government  assistance  and  contribution  to  shipping. 

Fourth.  All  the  countries  named,  except  the  United  States  (until 
1891)  and  the  neutral  Powers,  Holland  and  Norway,  have  regarded 
the  merchant  marine  as  a source  of  national  strength,  and  as  such 
entitled  to  national  consideration. 

Fifth.  All  the  countries  named,  except  the  United  States,  have 
regarded  the  merchant  marine  as  a source  of  national  wealth  and  a 
share  of  the  ocean  carrying  trade  as  an  object  to  be  sought,  and  not 
to  be  abandoned  when  once  secured. 

Now  note  just  here  that  Great  Britain,  from  the  moment  she 
discovered  that  she  had  within  her  own  bowels  the  material  for 
ship  building,  has,  by  huge  and  liberal  contracts  for  men  of  war, 
created  great  plants  wherein  vessels  of  steel  and  iron  can  be  con- 
structed. Next,  that  by  contracts  for  excessive  mail  compensation, 
she  has  induced  private  capital  to  also  call  upon  these  plants  for  a 
great  issue  of  mercantile  vessels,  until,  from  these  combined  influ- 
ences, these  plants  can  produce  cheaper  built  vessels  than  any  other 
nation,  and  hence  we  find  our  wise  Commissioner  notifying  us  that 
the  “ free  ship”  policy  means  solely  to  buy  our  ships  of  Great 
Britain.  And  he  shows  conclusively  that  all  the  foreign  built 
vessels  admitted  to  national  registry  by  the  countries  named  above 
have  come  from  Great  Britain  alone  ; and  that,  in  every  instance, 
when  such  policy  of  free  ships  has  been  adopted  it  was  necessarily 
accompanied  or  soon  followed  by  legislation  designed  to  promote 
domestic  ship  building  by  the  aid  of  that  government.  And  even 
with  all  such  legislation  in  1899  out  of  5,715  sea-going  steamers 
built  in  the  world,  four-fifths  of  them  were  constructed  in  Great 
Britain. 

So  that  buying  free  ships  in  the  cheapest  market,  even  aided  by 
the  wisest  possible  legislation  adduced  to  accomplish  the  object,  did 
not  establish  home  building  of  similar  vessels. 


7 


The  above  analysis  of  ship  building  also  calls  attention  to 
another  feature,  and  that  is  that  out  of  the  5,V15  steel  steamships 
built  in  Great  Britain,  1,838  were  navigated  under  foreign  flags 
instead  of  remaining  under  the  British  flag. 

In  the  case  of  Spain,  British  vessels  were  placed  under  the 
Spanish  flag  to  enable  them  to  engage  in  the  Spanish  coasting  and 
the  Colonial  trade  ; and  that  privilege  had  a sufficient  money  value 
to  induce  British  capital  to  transfer  vessels  to  the  Spanish  flag. 

In  the  case  of  Norway,  whose  growth  in  merchant  marine  is 
phenomenal  and  without  precedent,  she  has  acquired  vessels  built  in 
Great  Britain,  and  has  had  an  almost  equal  number  transferred  to 
her  flag  still  owned  by  British  subjects.  This  is  because,  by  Nor- 
wegian law,  the  vessel  can  load  to  a deep  water  line  and  can  be 
manned  by  a smaller  crew  than  either  under  German  or  British 
flag.  Norway  abounds  in  good  seamen,  and  has  no  need  to  have 
any  legislation  on  that  subject  ; they  live  frugally,  and  their  wages 
are  fully  one-third  less  than  on  British  vessels.  The  “ free  ship  ” 
policy  does  not,  therefore,  explain  the  growth  of  Norwegian  mer- 
chant marine,  and  no  other  country  can  safely  follow  her  footsteps, 
for  it  is  bound  up  and  dependent  on  British  legislation  which  she 
does  not  follow,  and  the  manning  of  Norwegian  vessels  with  a 
lesser  number  of  crew  and  lower  relative  wages. 

In  Germany  substantially  the  same  considerations  prevail.  The 
German  law  gives  to  her  ship-owners  the  widest  latitude  in  the  selec- 
tion of  crews.  No  test  of  nationality  is  imposed  on  master,  officers 
or  crew,  and  the  empire  has  stimulated  national  shipbuilding  and 
navigation  by  liberal  enactment. 

A vessel  is  permitted  under  German  law  to  carry  15  per  cent, 
more  cargo  than  under  the  British  flag,  and  with  smaller  crew  and 
at  much  less  wages. 

In  France,  vessels  built  anywhere  are  admitted  to  free  registry  ; 
this  admits  foreign  built  vessels  by  being  placed  under  the  flag  to 
engage  in  coasting  and  colonial  trade  ; this  practically  places  a 
premium  on  foreign  built  vessels  in  the  coasting  trade,  and  at  the 
same  time  only  allows  one-half  of  the  navigation  bounty  to  foreign 
built  vessels  in  the  foreign  trade.  Domestic  vessels  had,  therefore, 
only  advantage  of  half  of  the  bounty  in  foreign  trade,  and  none 
whatever  in  the  coasting  trade: 

A This  conclusion  is,  therefore,  drawn  : 

On  the  surface,  “ free  ship”  policy  is  buying  vessels  from  Great 
Britain  ; whether  such  a policy  will  or  can  be  adopted  is  dependent 


8 


on  a number  of  other  conditions,  partly  natural,  partly  artificial  ; it 
would  be  the  only  course  for  nations  which  cannot  produce  steel 
on  a large  scale,  as  Italy,  Japan  and  others. 

It  is  a natural  course  for  nations  with  a large  seafaring  population, 
with  low  wages,  like  the  Scandinavians. 

It  is  a reasonable  course  for  a country  like  Germany,  with  large 
ambitions  to  excel  on  the  sea,  linked  as  the  policy  has  been  with 
cheap  labor  and  intelligently  directed  Imperial  aid  to  national  ship 
building  and  navigation. 

The  Commissioner  says  in  addition  : All  powers  of  rank  except  the 
United  States  have  acted  on  the  hypothesis  that  a merchant  marine 
and  a ship  building  industry  are  essential  parts  of  any  system  of 
national  defence.  No  nation  has  considered  the  free  ship  policy 
alone  as  adequate  to  secure  to  it  the  desired  strength  on  the  ocean. 
No  first-class  power  has  cared  to  place  itself  in  a position  of  abso- 
lute dependence  on  the  ship  building  industry  of  Great  Britain.  To 
none  of  these  has  there  appeared  to  be  any  inconsistency  in  adopt- 
ing both  “ Free  ship  policy,”  connected  with  national  aid  to  shipping. 

Your  Committee  would  convey  to  you  its  sense  of  the  great  im- 
portance of  the  Commissioner’s  able  analysis  and  recapitulation  of 
the  constant,  continuous  and  never-failing  aid  extended  by  Great 
Britain  to  her  shipping  interests.  How,  since  1839  up  to  the 
present  time  she  has  voted  sums  ranging  from  2,500,000  to  6,000,000 
dollars  annually,  for  the  faster  and  larger  steamships.  How  she 
has  added  to  this  extra  sums  for  Admiralty  subventions  for  con- 
struction, so  that  guns  may  be  mounted — this  year  amounting  to 
$315,900.  How  she  has  again  and  again  amended  her  laws  in  refer- 
ence to  requirements  of  nationality  of  officers  and  crew  to  suit 
British  conditions.  How  she  devotes  large  sums  to  her  naval 
reserves  to  train  them  so  as  to  be  qualified  to  serve  on  auxiliary 
cruisers — this  year,  amounting  to  $1,317,000.  How  she  devotes  a 
large  sum,  $506,042,  to  be  paid  as  salaries  to  those  termed  Annual 
Retainers,  who  are  paid  to  attain  a qualification  to  serve  in  emer- 
gencies, rather  than  for  service.  How  she  also  makes  rebates  of 
light  dues  and  tonnage  taxes  to  vessels  which  carry  apprentices, 
amounting  to  $150,000  yearly.  In  fact,  he  sums  it  up  that  it  is 
British  policy  to  promote  any  phase  of  British  shipping  when  the 
necessity  for  assistance  appears. 

The  Commissioner  also  most  clearly  shows  how  Germany,  with 
the  same  ends  in  view,  has  continuously  contributed  substantial  and 
material  aid  to  her  shipping  by  subsidies  for  long  periods,  by  special 
legislation  to  aid  and  encourage  ship  building  by  granting  large 


9 


abatements  and  rebates  for  freight  transportation  of  all  materials 
used  in  ship  building,  stated  to  be  a very  large  item,  and  in  various 
ways  supporting  and  encouraging  that  industry. 

In  France  it  is  shown  that  natural  conditions  are  adverse,  that 
her  customs  duties  on  ship  building  materials  are  very  heavy,  and 
the  construction  bounties  were  insufficient  to  offset  the  enhanced 
cost  of  construction  in  that  country,  and  that  their  other  provisions, 
taken  together,  produced  the  maximum  expenditure  from  the 
Treasury  with  the  minimum  result  to  French  ship  building,  and 
tliat  even  a casual  review  of  the  fluctuations  and  inconsistencies  of 
the  French  methods  will  show  that  deductions  as  to  the  general 
results  of  such  a policy,  based  on  French  experiments,  are  wholly 
inconclusive.  We  have,  therefore,  in  this  very  remarkable  and 
able  report  of  the  Commissioner,  the  conclusive  and  absolute  proofs  : 

1.  That  “ Free  Ships  ” will  not  by  any  natural  operation  create  a 
ship  building  industry. 

2.  That  it  cannot  possibly  be  adopted  by  any  nation  with  success 
in  competition  with  the  nation  that  builds  the  vessel,  unless  com- 
bined with  the  resources  of  her  own  national  seamen,  and  who  will 
serve  at  equally  low  wages  and  under  equal  laws  of  every  character 
which  relate  in  any  particular  to  ships  and  their  cargoes. 

The  United  States  Government  finds  its  citizens  in  the  present 
state  : 

1st.  Almost  entirely  without  a merchant  marine  to  carry  its 
foreign  trade,  and  is  now  permitting  and  relying  upon  other  nations 
to  carry  nearly  the  whole  of  it — estimated  not  less  than  92  per 
cent. 

2d.  The  United  States  Government  finds  itself  dependent  on 
foreign  vessels  for  the  conveyance  of  its  foreign  mails,  and  at  this 
moment  cannot  arrange  regular  and  continuous  transmissions 
thereof,  by  reason  of  the  withdrawal  of  such  large  steamers  for  pri- 
vate use  by  their  individual  governments,  which  may  at  any  moment 
be  additionally  complicated  by  other  governments  becoming  in- 
volved in  war. 

3d.  The  Government  is  greatly  in  need  of  auxiliary  steamers, 
which,  by  some  arrangement  or  contract,  shall  be  at  all  times  availa- 


10 


l)le  to  the  Government  as  transports  or  cruisers,  as  was  most  forci- 
ble evinced  in  the  Spanish  war  and  since,  with  the  measures  con- 
nected with  tlie  Pliilippine  Islands  and  their  inhabitants. 

4th.  The  time  has  now  fully  arrived  when  the  industries  of  the 
United  States  can  no  longer  be  confined  to  the  limits  of  the  United 
States  and  its  own  citizens,  but  must  seek  other  markets  in  the 
world.  And  it  is  a well  established  fact  that  such  markets  cannot 
possibly  be  secured  and  maintained  by  vessels  under  a foreign  flag 
and  a competing  nationality  ; such  markets  will  in  the  end  be 
secured  by  the  nation  owning  the  vessels  which  carry  the  pro- 
ducts, all  other  things  being  equal. 

5th.  From  a neglect  of  the  shipping  interest,  a very  great  diminu- 
tion in  the  number  of  available  seamen  in  the  United  States  now 
exists,  and  unless  something  is  done  to  make  that  avocation  desira- 
ble, or  at  least  equal  to  the  advantages  enjoyed  in  other  pursuits, 
the  diminution  will  continue  until  we  lose  this  valuable  resource. 

6th.  The  ideal  condition  of  our  Republic  has  been  supposed  to 
be  that  after  constructing  proper  national  defences  dictated  by  wise 
engineering  ability — to  dispense  with  a huge  standing  army,  and 
trust  to  the  national  militia  to  always  supply  the  required  service. 
So  after  building  such  portions  of  the  navy  as  could  not  be  sum- 
moned into  existence  in  brief  periods,  to  depend  upon  the  merchant 
marine  for  the  rapid  and  effective  cruisers  and  aggressive  war 
vessels  more  destructive  and  injurious  to  the  material  interests  of 
every  enemy  with  a commerce,  than  many  battleships  ; relying 
upon  them  to  supply  to  the  navy  wdiat  the  militia  does  to  the 
army.  For  this  service  it  may  be  said  there  exists  practically  very 
little,  if  any  at  all,  at  this  time. 

The  Bill  before  us  is  intended,  and  by  its  title  pretends,  to  supply 
all  these  needs.  Your  Committee  find  that  the  Bill  is  the  result  of 
much  study  and  careful  construction  by  a combination  of  the  most 
respectable  and  eminent  men  engaged,  and  who  have  formerly  been 
connected  with  mercantile  shipping.  It  seems  well  calculated  to 
bring  about  the  results  aimed  at  by  its  title,  and,  so  far  as  details 
are  concerned,  will  undoubtedly  undergo  such  scrutiny  and  revision 
by  Congress  as  will  perfect  the  same. 

The  able  Commissioner  in  his  report  on  what  other  nations  are 
now  doing  for  merchant  shipping,  is  as  follows  : Amounts  of  cur- 


11 


rent  annual  expenditures  of  nations  for  subsidies,  mail  contracts, 
Admiralty  subventions,  bounties  and  other  kindred  payments  : 


Great  Britain — all  items  together, $5,851,525 

Germany 1,894,620 

France 7,632,242 

Italy, 2,185,266 

• Russia 1,371,187 

Austria-Hungary, 1,724,249 

Spain, 1,629,927 

Portugal, 63,300 

Netherlands, 259,971 

Norway, 136,948 

Sweden, 31,844 

Denmark, 82,455 

Japan, 3,492,107 


Total, ^ $26,355,641 

Total  amount  paid  by- the  United  States, 998,211 


The  Commissioner  also,  in  a most  able  and  convincing  manner, 
shows  that  the  reasons  which  impel  the  governments  of  other 
nations  to  promote  their  mercantile  marine  by  legislation,  apply 
with  equal  and  greater  force  to  the  United  States,  these  reasons 
being  political  and  commercial.  Under  the  first  class,  1st  the  rela- 
tions to  the  navy  of  the  merchant  marine  as  an  element  in  the 
national  defence  ; 2d,  the  relations  of  a merchant  marine  to  insular 
territory  ; 3d,  the  relations  of  a merchant  marine  to  new  markets, 
as  those  of  Asia,  Africa  and  South  America.  Under  the  second 
class,  or  commercial,  1st,  the  necessities  of  ocean  mail  commu- 
nication ; 2d,  the  relations  of  a national  merchant  marine  to 
national  exports  and  imports  ; 3d,  the  value  of  the  carrying  trade  ; 
4th,  the  promotion  of  shipbuilding  and  contributory  industries. 

Your  Committee  cannot  avoid  here  repeating  some  of  the  most 
forcible  of  the  Commissioner’s  statements  on  these  points. 

a.  The  relations  of  the  merchant  marine  as  an  element  of 
national  defence  gives  to  navigation  and  ship  building  a claim  far 
in  excess  of  other  industries  on  legislative  consideration.  Great 
Britain,  with  a navy  equal  to  any  other  three  powers  combined, 
deems  it  necessary  to  maintain  a fleet  of  28  auxiliary  cruisers, 
aggregating  186,380  tons,  for  which,  in  the  form  of  7\dmiralty  sub- 
ventions, she  gives  annually  <£65,000,  or  $325,000.  The  German 
contracts  with  the  North  German  Lloyds  has  the  same  end  in 
view.  The  United  States,  with  a much  larger  coast  line,  have 


12 


greater  need  of  such  vessels  than  any  other  power,  except  Great 
i:Jritain. 

b.  Tlie  merchant  marine  must  be  relied  on  to  furnish  the  seamen 
needed  in  emergency  to  man  war  vessels.  On  their  naval  reserves, 
employed  in  merchant  vessels,  Great  Britain  expends  annually 
$1,250,000,  and  France  and  Germany  give  subsidies  for  the  same 
avowed  purpose. 

c.  Before,  during  and  since  the  war  with  Spain,  this  country  has 
been  found  woefully  deficient  in  means  of  transporting  our  troops, 
by  no  means  in  large  numbers.  We  have  been  obliged  to  purchase 
transports  abroad,  and  even  to  charter  transports  under  foreign 
flags  and  subject  to  foreign  laws,  {vide  the  Tartar,  a British  vessel 
bringing  American  troops  from  Manila,  detained  at  Hong  Kong 
for  failure  to  observe  British  regulations).  In  the  war  with  China, 
Japan  transported  by  merchant  vessels  under  her  own  flag  larger 
bodies  of  troops  than  the  United  States  has  been  called  on  to  move 
at  any  time  during  the  past  two  years. 

d.  Assistance  rendered  to  construction  of  domestic  built  vessels 
re-acts  in  lowering  cost  of  building  naval  vessels,  and  vice  versa. 

2d.  The  obligation  of  a nation  to  furnish  suitable  means  of  mail 
and  commercial  communication  between  itself  and  its  insular  pos- 
sessions is  everywhere  recognized,  regardless  of  the  economic  theory 
held  by  the  Government.  This  recognition  is  one  of  the  elements 
of  strength  of  the  British  Empire.  France,  Germany,  Italy, 
Holland  and  Portugal  all  follow  this  example,  and  for  many  years 
Spain  spent  on  an  average  $1,700,000  to  maintain  communication 
between  the  Colonies  and  the  Peninsula.  Whatever  may  be  the 
future  form  of  government  of  the  Philippines,  Porto  Rico  and 
Cuba,  w^e  are  bound  to  supply  now,  means  of  communication  by  sea 
at  least  as  good  as  those  furnished  by  Spain. 

3d.  Our  legitimate  interest  in  the  development  of  the  markets  of 
Asia  are  as  great  as  any  European  power.  Our  geographical  op- 
portunities for  sharing  in  these  markets  are  superior  to  those  of 
any  European  nation.  The  agencies  of  six  great  powers  are  at 
work  promoting  their  several  desires  to  possess  these,  and  the  most 
powerful  of  these  is  Government  support  to  shipping.  To  this 
trade  alone  these  powers  grant  $5,000,000,  whilst  the  United  States 
spent  $48,451. 


DUPLICATE 

Author..22.A.!^4fr.L.i...„^'^0^^  .C.X-<s^2trKW-4:^^ 

(Surname  firs|!)  _ D 

iVrt  »«Ur.A  Title 

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Pa-fe »{  3: ll 


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973206 


Univ.  of  111.  Lib. 


Edition Place Vnh\\s\itr.C*!^..:A 

Date  of  pub L^.P...^.. Vols Price. — .'_...™^.. 

To  be  charged  to 

Recommended  by Approved  by 


.fund. 


When  this  book  has  been  received  and  cataloged  this  card,  if  filled  out  by 
the  department,  will  be  returned  to  the  person  “recommending,"  or,  if  no  one  is 
specified,  then  the  one  “approving"  the  book  order  for  his  information. 


116 


3 


These  facts  and  arguments  are  entirely  apart  from  and  above  the 
considerations  prompting  to  free  trade  or  protection.  They  are 
national  rather  than  commercial,  and  is  not  essentialiy  a proposition 
of  government  aid  to  private  enterprise. 

4th.  The  commercial  reasons,  that  lead  other  nations  to  devleop 
their  mercantile  shipping,  have  as  much  force  in  this  country  as 
elsewhere.  First,  the  overpowering  desirability  and  necessity  of 
carrying  the  nation’s  ocean  mails  in  the  nation’s  own  vessels,  is  con- 
trolling Great  Britain,  Germany  and  France,  and  convincing  facts 
are  shown  by  the  Commissioner  to  prove  it. 

5th.  The  normal  proposition  that  “ Trade  follows  the  Flag  ” is 
dwelt  upon  and  its  value  illustrated  by  a quotation  from  the  Presi- 
ident  of  the  P.  & O.  Co.,  at  an  annual  meeting  two  years  ago. 
“ Our  policy  is  that  a British  Company,  which  is  keenly  alive  to 
British  interests,  and  I believe,  in  this  respect,  we  represent  the 
general  feeling  of  the  ship  owners  of  the  country.”  ^ 

6th.  The  enormous  value  of  the  trade  has  been  heretofore 
dwelt  upon,  and  must  surely  be  realized  by  all. 

Sufficient  has  been  said,  certainly  to  at  least  convince  any  fair 
mind  that  our  present  and  past  status  is  anything  but  desirable,  and 
that  if  it  be  possible  to  devise  and  adopt  any  remedy,  it  should  be 
promptly  done.  Five  measures  of  legislation  have  been  pro- 
posed within  recent  years,  viz.  : 

First.  Discriminating  duties,  favoring  goods  carried  in  American 
vessels. 

Second.  Bounties  on  exports  in  American  vessels. 

Third.  Free  registry  for  foreign  built  ships. 

Fourth.  Mail  subsidies  to  fast  steamships. 

Fifth.  Navigation  bounties,  based  on  tonnage,  mileage  and 
speed. 

The  first  proposition  (discriminating  duties)  may  be  at  once  laid 
aside.  It  is  in  conflict  with  practically  all  our  commercial  treaties, 
and  its  adoption  would  require  a readjustment  of  our  trade  rela- 


14 


lions  with  the  world.  It  invites  retaliation  ; it  was  tried  in  France 
in  1872,  and  abandoned  as  disastrous  within  eighteen  months. 

The  second  proposition  (bounties  on  exports)  is  not  feasible,  as 
our  commercial  treaties  bind  us  to  pay  such  bounties  to  foreign 
vessels  also,  if  paid  to  American  vessels. 

The  third  proposition  (free  ships)  has  been  demonstrated  herein 
to  be  ineffective.  The  cost  of  operating  vessels  in  the  foreign 
trade  is  much  greater  than  under  foreign  flags,  and  legislation  by 
Congress  during  the  past  few  years  has  increased  this  disadvantage. 
The  proposition  does  not  profess  to  and  does  not  in  any  way 
benefit  the  ship  building  industry. 

The  fourth  and  fifth  propositions  brings  us  to  the  Bill  in  ques- 
tion, which  is  the  result  of  two  years  continuous  deliberation  and 
study  over  the  matter  by  the  conference  of  able  men  hereinbefore 
mentioned.  Its  title  and  preamble  sets  forth  its  objects  and  the 
results  expected  to  be  obtained  by  its  provisions,  as  follows  : A Bill, 

First.  To  promote  the  commerce  and  increase  the  foreign  trade 
of  the  United  States,  and  to  provide  auxiliary  cruisers,  transports 
and  seamen  for  Government  use  when  necessary  ; and 

Whereas,  The  profitable  employment  of  the  surplus  productive 
power  of  the  farms,  factories,  mines,  forests  and  fisheries  of  the 
United  States  imperatively  demand  the  increase  of  its  foreign  com- 
merce ; and 

Whereas,  The  merchant  vessels,  officers,  engineers,  machinists, 
electricians  and  seamen  necessary  to  the  increase  of  the  commerce 
of  the  United  States  are  also  essential  as  auxiliary  to  the  forces  of 
the  United  States  in  time  of  war  and  otherwise,  and  to  the  better 
security  of  the  nation  and  the  protection  of  its  possessions  ; and 

Whereas,  It  is  deemed  especially  expedient  to  make  immediate 
provision  to  these  ends  ; therefore, 

From  all  that  we  have  presented  in  the  foregoing  your  Com- 
mittee have  arrived  at  the  conviction  that  it  is  now  a question  of 
this  Bill  or  nothing.  Your  Committee  have  endeavored  to  elicit 
intelligent  expressions  of  members’  views,  either  for  against  the 
Bill.  In  this  they  have  failed.  The  objectors  simply  indulge  in 
disapproval  of  the  Bill,  coupled  with  the  general  opposition  to  sub- 


15 


sidies  in  any  shape,  and  descending  thence  to  vituperation  and  a 
declaration  that  the  Bill  is  a steal  and  nothing  else.  In  no  instance 
‘is  there  an  argument  entered  upon  worthy  of  repetition  after 
reading  the  foregoing  statements,  as  results  of  experience  and 
facts.  Those  members  who  are  opposed  to  the  principle  of  Protec- 
tion in  any  form  or  degree,  can  and  do  with  perfect  consistency 
object  to  subsidies,  and  hence  this  Bill — but  no  one  who  favors  a 
Protective  Tariff  enacted  to  encourage,  establish,  or  maintain  any 
industry  in  the  United  States,  or  who  enjoys  in  his  own  invest- 
ments the  profit  insured  to  the  industries  he  is  interested  in — can, 
with  any  consistency,  oppose  this  Bill.  There  is  not  the  slightest 
difference  between  profits  derived  from  higher  prices  exacted  from 
the  public  by  means  of  a high  tariff  on  the  same  article  when 
imported  and  the  same  amount  of  money  given  direct  from  the 
Treasury  of  the  United  States  to  a specific  industry  for  its  special 
encouragement.  It  does  not  become  intelligent  citizens  to  on  the 
one  hand  approve  and  sanction  a high  .protective  tariff  and  enjoy 
all  its  benefits,  and  on  the  other  make  senseless  clamor  over  a pro- 
position to  remedy  a national  loss  and  great  existing  want  and 
deficiency  because  it  takes  the  form  of  a subsidy.  As  merchants 
and  business  men  we  must  acknowledge  that  for  many  years  past 
the  majority  of  the  citizens  of  the  United  States  have  decided  in 
favor  of  the  system  of  protection,  and  it  has  been  adopted,  and 
we  are  living  and  prospering  in  a marvellous  manner  under  it,  and 
this  Bill  is  entirely  consistent  with  that  prevailing  principle. 
Your  Committee,  after  its  very  full  and  careful  examination,  deem 
it  a very  conservative  measure  limited  as  to  duration  and  amount  ; 
its  utmost  limit  will  not  be  attained  for  years,  and,  when  attained, 
is  at  once  reduced  in  its  total  by  the  loss  to  all  vessels  receiving 
pay  of  all  compensation  for  carrying  the  mails — equal  as  estimated 
to  about  20  per  cent,  of  the  whole  pay — at  the  present,  and  for 
years,  the  annual  amount  required  will  not  probably  exceed  from 
two  and  a half  to  three  and  a half  millions.  And  in  return 
for  the  appropriation  the  Government  will  at  once  enter  into 
the  command  of  transports,  and  soon  of  rapid  mail  carriers, 
an  invaluable  and  indispensable  aid  to  our  navy.  It  is  certainly 
a good  investment  for  the  Government  as  an  aid  to  national 
defence,  whilst  it  will  enable  the  merchant  to  avail  himself  to 
the  full  national  extent  of  the  new,  great  and  inestimable 
markets  now  opening  to  us  in  Cuba,  Porto  Rico,  the  Philip- 
pines and  Asia  generally.  Whatever  may  be  our  individual 
views  as  to  the  causes  and  process  which  has  led  up  to  our  present 


Itt 


state,  one  thing  is  certain,  we  now  own  and  control  these  wonderful 
possessions  in  the  West  and  Blast  Indies,  and  whilst  in  due  time  we 
shall  extend  to  them  all  the  freedom  and  liberty  they  prove  them- 
selves capable  of  receiving  and  maintaining,  it  will  always  be  pre- 
serving the  rights  and  benefits  which  we  have  attained  at  the  cost 
of  our  nation’s  blood  and  money.  So  that,  as  has  been  shown,  we 
owe  these  possessions  and  ourselves  duties,  which  can  only  be  per- 
formed by  such  action  as  this  Bill  proposes,  and  your  Committee^ 
therefore,  cordially  recommend  its  approval  by  this  Chamber,  in 
the  form  of  the  following  resolution  : 

Resolved^  That  this  Chamber,  after  careful  consideration  of  the 
subject,  as  evinced  by  the  report  this  day  made  by  its  Committee 
on  the  Harbor  and  Shipping,  hereto  annexed,  do  heartily  approve 
the  objects  sought  to  be  accomplished  by  Bill  H.  R.  64,  without 
expressing  an  opinion  on  its  details. 

All  of  which  is  respectfully  submitted. 

(Signed,) 


A.  Foster  Higgins, 
Samuel  D.  Coykendall^ 
John  H.  Starin, 
William  P.  Clyde, 


Of  the  Committee 
on  the  Harbor 
and  Shipping. 


New-York,  January  1900. 


UNIVERSITY  OF  ILLINOIS-URBANA 


